Tuesday, May 20, 2008

K&C Quotables

Some notable quotes from last night's Kudlow & Company:

Shorting Buffett Yogi Berra once said, 'Even Napoleon had his Watergate.' And in the case of Warren Buffett, his Watergate is an investment style drift which is really a no-no in the money management business. You have to stick to your knitting. Look, I worship at the knee of Warren Buffett, and all he has accomplished over the years. But the reality is, in the last decade, he’s under performed dramatically, and he’s drifted in terms of strategy. He calls derivatives ‘financial weapons of mass destruction,’ yet he has about $40 billion dollars on his books, and lost $1.2 billion in the first quarter. And [while] everyone admires him, and goes to the Woodstock of Capitalism in Omaha and praises his accomplishments, his stock is starting to do poorly. And, frankly, in terms of being a value investor, he’s opened up his book in the last decade, and there are many Buffett wannabes who follow exactly what he does, so it’s much harder for him to do what he does. You look at his largest investments, he has $9-10 billion dollars in Coca-Cola, Wells Fargo and Bank of America, those stocks have flat lined for nine years.

-Doug Kass, president Seabreeze Partners Management

MSFT, YHOO & Carl Icahn You know it’s actually kind of a tough one to call. But I’ll tell you what it looks like right now. This looks less like Microsoft trying to buy Yahoo, really, then Microsoft trying to scuttle a deal with Google. If you think about the timing, this week, we were expecting Yahoo to actually announce this search partnership with Google. And I think that got Microsoft very, very anxious. And that’s why you see them back here. It’s not clear to me that you definitely see a transaction out of this, though I know Microsoft’s been hinting at that.

-Andrew Ross Sorkin, chief mergers & acquisitions reporter at The New York Times

In the Bull Camp I’ve been bullish for a while now, Larry. And I shocked a few people when I turned bullish. But the market seems to want to go higher. The economic data is overtly bearish and yet share prices go up. I’ve been around for 35 years, and when you see a market that goes up, in the face of overtly bearish news, it’s likely to continue. We must remember the news is always its most bearish at the bottom of a recession. I think that’s where we are. And earnings begin to look upward later on. So I’m quite bullish on the stock market and continue to be.

-Dennis Gartman, editor and publisher of the Gartman Letter

Supply-Side Tsunami You just can’t paint all of Europe with one brush. Yes, we have spots in Western Europe that are slowing down. [But] the fact of the matter is that Poland is still booming. Bulgaria is booming. The Czech Republic, Lithuania. Why are they booming? Oh, I don’t know, let’s think: They’ve got great labor laws. They have flat taxes. They basically have no capital gains tax. Connect the dots! It works. It works in a big way. And when everyone was saying, ‘Wow, wait until Western Europe gets their hands on Eastern Europe, they’ll show them how to make things work,’ just the opposite has happened.

-Dr. Bob Froehlich, chief investment strategist at DWS Scudder

Obama's SUV Green Speech in Oregon All that was missing was the cardigan sweater that Jimmy Carter used to wear when he talked about a 'malaise.' This is hardly [Ronald Reagan's] 'Morning in America.' It is an austerity agenda. I think that when it comes to energy policy, the Democrats have a very schizophrenic message. They can't figure out whether they want energy prices to be higher, so that people use less and we have less global warming, or lower to help consumers. I'm for the lowest energy prices we can get.

-Steve Moore, senior economics writer at the Wall Street Journal